Six Sigma At General Electric Essay

971 words - 4 pages

Six Sigma at General ElectricIntroduction:- Six sigma is sophisticated quality program developed by Motorola in 1986 that is designed to reduce defect to 3.4 per million ,improving quality ,reduce cost, increase customer satisfaction .-according to analysts ground work for implementation of six sigma at GE began in 1998 in the form of initiative known as workout program-IN 1995 JACK WELCH former CEO at GE felt that there was a need for a quality program. Efficiency, customer service and product quality were all not at the desired level.-Example: according to the company estimates about 7 to 10 billion incurred in the form of scrap that can be avoidable cost.Benefit to the Company, Stockholders, and Customers:1- The cost of poor quality: The cost of poor quality is significantly higher than most companies realize. At three sigma levels, poor quality accounts for 25-40% of sales. Once a company achieves Six Sigma levels, this cost drops to less than 1% of sales Because quality has a major impact on a company's financial performance and is a key determinant of customer satisfaction.2- world-class Six Sigma levels: By achieving world-class Six Sigma levels, GE improved the quality of products delivered to its customers, which in turn improved financial results, thereby benefiting customers, the company, and stockholder. For example, the GE Fanuc Automotive manufacturing plant creates high-tech automation products such as industrial lasers and programmable logic units. There were 130 active Six Sigma teams at a time led by employees who obtained green, black, and master black belt Six Sigma certifications. These individuals worked together on cross-functional teams identifying ways to translate customer feedback into higher quality products while reducing costs. "GE was a three sigma company and the cost of failure was estimated at 15% of sales. But achieving Six Sigma represents a $4 billion cost-reduction opportunity.3-the first five years of Six Sigma implementation, operating margin increased from 14.4% to 18.4 in 2000 alone, quality improvement efforts generated $2.4 billion in savings. GE was seeing positive returns on globalization initiatives and strength in its service oriented businesses.Benefits to Employees:1-Not only do customers, stockholders and the company benefit from Six Sigma implementation, but employees benefit as well. To ensure all employees had the skills necessary to identify and resolve quality problems, every employee attended Six Sigma training and had a portion of compensation tied to demonstrated use of Six Sigma practices.2-the advantage for employees included not only training and compensation but also job security, as better products means happier customers, which means more market share for GE and more security for employees.3-Many Six Sigma experts state that the best way to gain momentum and create a quality culture is through sustained communication, employee engagement, training, rewards, and...

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